Called BofA about surrendering

[Confused33]

They told me that they were registering me for a short sale and that I had to have the home on the market for 90 days before they would do a deed in lieu.

Is this standard proceedure?

The guy also told me that if I can't make payments in the mean time there will be a $46.00 late fee monthly and that will come out of whatever I sell it for if it sells.

I'm so confused. This is consuming me.

[justbroke]

Sounds to me like you wanted to just deed in lieu the property. What most people don't understand is that Banks don't just accept Deed in Lieu proposals unless and until the home has been on the market for at least 90 days.

It was probably confusing to you, because you thought that you could just give the house back to the Bank, but it doesn't work as easily as you may think.

I actually think this is a strong-arm technique, but seems to be legal for the Banks to do. They get you to sell it on the market. You will certainly get more for it than they will in a foreclosure. It's a win for them, but you still lose in the end.

[Confused33]

The problem is going to arise if a realtor comes along and sells my home. I won't have the equity to pay them a commission. LOL

[justbroke]

The problem is going to arise if a realtor comes along and sells my home. I won't have the equity to pay them a commission. LOL

Well, you tell the Realtor that it's a Short Sale and be very open. The Realtor then works with your Bank to come up with the commission that the Bank is willing to take (usually based on sales price and is in a particular range). The Realtor may have to settle for 1.99% as the listing agent, and the selling agent may also get only 1.99% (worse case I've seen these days is the 1.99% to both the listing and selling agent). It may also be ranged such that if you get market value, then they get full commission (3.00% for each of listing and selling agent).

So, in the end, don't worry. There are Realtors that will take a "short sale" home as listing agent any day. Usually, the listing will note that the home is a short sale and that the selling agent may need to reduce their commission to have the Bank approve the sale.

[DeadManCrawling]

Indeed, most realtors are familiar with short sales and reduce their commission accordingly. My wife has been an agent for many of these sales, and typically they reduce the realtor commission at the same time as they negotiate a lwoer price on the property, if there is an offer.

Generally the bank will accept a lower price offer as well, and that helps the realtor gain a little more profit.

You want the realtor to get paid as well as possible under the circumstances, since they will be doing the work. Short sales are a LOT of work for the money. My wife once worked a short sale that involved 2 lenders, 2 divorcing owners, 2 other lienholders and a HOA. Her commission ended up being about $600.00. The whole deal took over 100 hours to put together, so she lost money in the end. In other cases she has made decent money but the workload is incredibly high for the agent.

As far as the 46 dollar penalty-I say WHOOO HOOOOOOO! Where else can you rent that cheap?

Good luck in all this!

[Goodgrief]

I got the same spiel from Fidelity Bank. 90 days listed before they do anything else. So i listed my house with remax last week and told her it will have to go to short sale. she agreed after looking up comps and seeing I was 40k upside down on my 104k loan. Now I am just planning on letting it going to forclosure and filing Bk next year(when I am able). Good luck.

[chad9162]

I hate to tell you this but "Short Sale" is all smoke and mirrors. In fact most lenders make it so difficult for buyers to buy that they hardly ever sell. In the mean time your lender will probably start foreclosure proceedings. Foreclosure is actually better for a 1st lien holder because it gets rid of all the other lien holders. Depending on where you live these other lien holders become unsecured debt and can sue you.

The reason the lender wants a Short Sale is that they have to show an attempt to sell the house in order to collect on the mortgage insurance (so there's really no lost to the lender). Again they are not short selling out of kindness for you, its all business.

If at this point you just want to walk away then do so. I'd probably stay and live rent free. I definitely wouldn't do any improvements or pay the mortgage. You might as well burn the money instead. As for realtors fees that's between the realtor and the bank. Again its all smoke and mirrors. In my area No. California, most realtors, are just stay away from short sales and waiting till it forecloses.

Again stop paying your mortgage and live rent free as long as you can then move.